In 2020, over two billion people purchased goods online, with e-commerce sales generating 4.2 trillion dollars worldwide.
As an e-commerce site, you want to take a chunk of that pie. An effective way to do that is by finding a niche for your site.
When you have an e-commerce site, you want to attract people to your products and services while also establishing customer loyalty. This is what finding your niche is about.
A business niche is the focus area within a larger market. It’s a good way for small businesses to establish themselves and carve out an edge against stiff competition. A niche audience allows you to curate a site to attract a core group, thus allowing a better shot at success.
Criteria for a Good Niche
Establishing a niche means you have to build your brand around it. A niche is a specific product or service targeting a specific audience. Clothes, for example, are a broad category, while dresses for girls are a niche.
Related: What is an eccommerce agency?
But you can’t simply pick a niche at random. So, how do you go about finding an effective niche for your e-commerce site?
Here are some of the criteria that e-commerce sites must consider when finding their niche.
Competition
When identifying your e-commerce niche, ensure you understand the level of competition involved. It will help you decide whether the niche is still worth penetrating or if it’s already oversaturated.
Related: Best Competitor Analysis Tools
Once you decide on a niche, you also need to study how the competition is marketing their products. Check their sites and social media to learn how you can improve upon their best practices and learn from their possible mistakes.
Demand
Studying the market demand is crucial in determining if you are choosing the right niche.
How do you determine demand? It’s often about studying what’s trending on the internet, which will give you a better idea of trending niches.
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Seasonal Component
The market demand for a certain product will inform you whether it is popular around the year or only during certain months.
Seasonal doesn’t mean you will only earn during a particular season. It just means there is peak demand for your product or service in certain periods.
Ways to Find a Profitable Niche
Do Keywords Research
This is one way of knowing if people are actually interested in the niche you are planning to tap. There are numerous free keyword search tools online that are quite easy to use.
Related: How to do SEO Keyword Research?
You simply enter a keyword or phrase and press “look up.” You will find how much in demand they are, which will give you an idea about the demand for the product or service.
Related: Best SEO Keyword Research Tools
- Google Trends
This Google analytical tool allows you to analyze the top search queries on Google. It provides significant information such as where a certain keyword/phrase is trending plus the language and time.
It’s a good way to know whether a trend is on the rise or if the market is about to go down and learn about trends that don’t go out of date. You will also see a graph indicating whether interest or demand for the topic is waning, along with data from previous years. You can gauge interest in a product from a worldwide or local perspective.
- Google AdWords
Google AdWords is an advertising system that helps businesses reach their online target market. It also has a component that can help companies find their target niche.
Businesses use Google AdWords to display their ads on the Google search results page. These ads are either on top or at the bottom of the search engine result.
- Keyword Planner
This is a free Google tool that helps businesses search for the best keywords to use to promote their product or service. You can discover keywords related to the products or services and get a report on the number of searches for those keywords or phrases every month.
- Ahrefs
Ahrefs is an all-in-one SEO tool that helps businesses with link building, keyword research, competitor analysis, tracking, etc.
Track Popular Marketplaces
When you cross-reference multiple marketplaces and see what people are buying from them, you get a better idea of the niche that may be ideal for you.
Amazon
This is the most popular e-commerce site in the world, making it a great starting place to search for possible niches for your eCommerce site. You can search for items that interest you and check how many related products are sold on Amazon. It’s also a good way to learn about the future competition.
You can make your product research on Amazon first, which you can then comb through to finalize a niche for your site.
Walmart
The world’s biggest company in terms of revenue, Walmart is also the second-biggest online retailer in the US. The brand also has a third-party marketplace that allows businesses to sell niche products.
Look for Social Media Trends
You can find your niche just by browsing social media. In fact, your market is there too! You just need to narrow it down based on demographics and socioeconomic factors, geography, and behavioral factors.
Top 5 eCommerce Niches
1. Eco-friendly products
Searches for more sustainable products are on the rise. According to a study, 72% of people are actively buying more environmentally-friendly products today than five years ago. And with 9% more buyers joining the cause, there is a greater likelihood of this trend impacting future purchases.
2. Pet Products
The pet care industry is massive, and the demand for pet products has grown over the years. It was worth $245 billion in 2021, increasing to $265 billion in 2022. It is also noted to have an estimated 6.1% compounded annual growth rate.
3. Home Office Equipment
Home office equipment has always been popular but has gained more traction in recent years, given the massive shift to “Work From Home” on a global scale due to the COVID-19 pandemic.
And despite the pandemic showing signs of dying down, many businesses continue to operate remotely or have adopted hybrid models. This has led to a steady increase in the demand for home office equipment.
4. Health and Wellness
The pandemic has been instrumental in making people more conscious of their health. As of 2021, health and wellness is a $1.5 trillion industry with an approximately 5 to 10% annual growth. There are also sub-niches in this industry that businesses can penetrate.
5. Vegan Products
About 6% of Americans are vegans, and this trend is expected to grow. However, veganism is not yet mainstream, resulting in many vegans struggling to find restaurants with delicious vegan food or high-quality vegan products. This issue offers significant potential from a business perspective.
Find Your Niche
Finding a niche market is a reliable way to establish your e-commerce site. It will define your brand and help you establish a small but loyal customer base.
And once you have the attention of your niche audience, you could always consider expanding by introducing new products and capturing a larger audience.
